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Post by trenddiver on Aug 19, 2015 19:06:34 GMT -5
Aren't we saying the same thing? He's saying that even the thought of Sanofi expending funds/efforts to prepare trials as evidence of their commitment is laughable...but what he is doing is saying that he thinks it is foolish to short here by closing out yet another short position. That's the point I was making. So that's a good question to ask him: why do his actions not match his words? Unless...of course...he is certain it is going to tank...but he wants it to run up so he can short it again....but it is doubtful he can move the market to do that. This is my interpretation. Although his analyst is very bearish, the analyst doesn't run the HF. And by the way, they still own a bunch of $7 January 2016 puts. And my contact never said he was certain it was going to tank. What he told me was that based on his information, Sanofi's CEO will be evaluating all the partnerships in the 4th quarter, 2015 and 1st quarter, 2016 and that Afrezza was on chopping block (that doesn't necessary mean Afrezza will get chopped). As to closing out his short, I guess he knows when to take profits (that's what you do when you run a hedge fund), and yes if it went up to 7 or 8 again, he'd probably short it again. He thought the risk/reward right now was not favorable to being short.
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Post by trenddiver on Aug 19, 2015 17:19:56 GMT -5
Ok. Here is the reply (from HF contact referring to his analyst comments on the study):
His answer was so outlandishly bearish I couldn't send it. "They (Sanofi) spend more on coffee and muffins at corporate headquarters than this trial will cost them"
That said we are covering another half of our short in the high 3s-4. I think in high 3s risk to reward nowhere near as good. We shorted it at 7.5-8
Trend
Ha! "I'm certain it's going down!...but I'm closing another short position." Translation: Please don't buy before I do and jack my purchase price up...it cost me a lot to get it down here and I did that so I could benefit...not you. Very truly yours, Satan (no offense to your friend...meant as a joke). Ha Ha. Very interesting translation, but I don't think so. What is interesting though is his opinion that risk/reward doesn't warrant staying short at these prices.
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Post by trenddiver on Aug 19, 2015 17:02:26 GMT -5
FYI - Harry posted this a bit ago. Looks like SNY by undertaking this is making a longer term commitment so to steal the heading of this thread, take it for what its worth. As others noted, if they were about to bail, they would not be doing this. Trend, not sure if you have a way of communicating with your HF contact but it would be interesting to hear their response to this. mnkd.proboards.com/thread/3295/afrezza-safety-pharmacokinetics-study-pediatricPS - as far as the shorts go, my guess is they got more and more excited after each CRL thinking they hit pay dirt. Obvious they didn't do much research on Al Mann. Decades and decades of me to products in the diabetes industry. Some nice innovation but the exception rather than the norm. Perhaps all the innovation was saved up to use in one product. If so, my bet is that Afrezza is the one. I forwarded the link on. I'll let you know what the reply is, if any. Trend
Ok. Here is the reply (from HF contact referring to his analyst comments on the study):
His answer was so outlandishly bearish I couldn't send it. "They (Sanofi) spend more on coffee and muffins at corporate headquarters than this trial will cost them"
That said we are covering another half of our short in the high 3s-4. I think in high 3s risk to reward nowhere near as good. We shorted it at 7.5-8
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Post by trenddiver on Aug 19, 2015 16:14:51 GMT -5
I will no doubt get trashed for saying the following but it needs to said. I've been coming here for several months but my visits are becoming increasingly rare. That's because I'm finding it little better than the yahoo message board or any other forum that allows any and all anonymous user to post whatever he or she desires. As a result, you have a thread that begins with "Interesting posts on the Yahoo message board. If true, this is (as the Donald would say) HUGE!" and another entitled "For What It's Worth" Both threads are purely speculative, with no one really knowing the veracity of the person who started the discussion, nor the validity of the basic information being discussed. Nevertheless, this discussion will proceed for days upon days and page after page, with the endless flow of speculation over speculation and guesses about guesses. How useful is information or disinformation emanating from unknown posters with unknown motivations and all of the subsequent speculation? This board clearly has some very useful posters but it could be so much better. Having a few knowledgable gatekeepers would be immensely helpful. So, too, the requirement that posters have some concrete, verifiable information before being able to initiate a discussion. I haven't given this a whole lot of thought, although I must admit to having registered as a member out of pure frustration. To all those who created this board and work tirelessly to make it useful, you have both my gratitude and my apologies for the above critique. Greg, So here you are. A newbie to the board - about a 3 week member, who knows nothing about most members and starts questioning the veracity of those that post. For me, I have been a member of this Board since its inception and have met several other board members at the ASM. And my title on this board is Principle Investigator, which is what I like to do. And I can assure you and every one else on this board that I can back up every statement that I have posted with documentation. As for the moderators, they do a great job. I can say that because I have been "moderated" in the past.
As for you, you are not required to log in or post. And if you registered out of frustration and are still frustrated, I suggest you get some therapy.
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Post by trenddiver on Aug 19, 2015 13:14:25 GMT -5
Suppose that Sanofi actually did pull the plug in the 1st or 2nd quarter of 2016 and left Mannkind with 100% ownership of Afrezza. Although we would probably see a much lower SP for a while, I believe Mannkind might be better off in the long run for the following reasons:
1. Much of the heavy lifting would have been already completed. 2. Sanofi would have paid 2/3 of the start up expenses currently running at around $35 million per quarter. So at the time of the termination, Sanofi would have paid somewhere between $150-200 million of expenses in connection with the launch, additional studies, and world wide approvals. 3. Mannkind would have received at least $200 million in milestone payments which are non refundable to Sanofi 4. Yes, Mannkind would have to develop its own sales force and hire some experienced executives with a drug commercialization background. 5. Mannkind may have to raise additional capital to do this which would mean some dilution.
For me, I would feel much better about Mannkind and its ability to control its own destiny with Afrezza and not be beholden to Sanofi's commercialization launch program or possible conflicts of interest. Further there would be much more accountability to shareholders for the success or failure of Afrezza. But the bottom line is that although the costs of going alone might be steep, the benefit to shareholders of owning 100% of the upside could far outweigh the costs.
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Post by trenddiver on Aug 18, 2015 16:22:04 GMT -5
FYI - Harry posted this a bit ago. Looks like SNY by undertaking this is making a longer term commitment so to steal the heading of this thread, take it for what its worth. As others noted, if they were about to bail, they would not be doing this. Trend, not sure if you have a way of communicating with your HF contact but it would be interesting to hear their response to this. mnkd.proboards.com/thread/3295/afrezza-safety-pharmacokinetics-study-pediatricPS - as far as the shorts go, my guess is they got more and more excited after each CRL thinking they hit pay dirt. Obvious they didn't do much research on Al Mann. Decades and decades of me to products in the diabetes industry. Some nice innovation but the exception rather than the norm. Perhaps all the innovation was saved up to use in one product. If so, my bet is that Afrezza is the one. I forwarded the link on. I'll let you know what the reply is, if any. Trend
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Post by trenddiver on Aug 18, 2015 16:13:31 GMT -5
Here is the language from the Company's recent SEC filing. Essentially they are saying that the milestone payments represent a non refundable advance with certain future requirements and obligations to be performed by MNKD including the funding of 35% of the start up expenses. Since there is no way to measure the amount and duration of the startup expenses (profitability) the cash received from the advance is reflected in some deferred income account which is shown on the Balance Sheet as a liability because of MNKD's obligations to perform under the collaboration agreement. At some point in the future if and when profitability occurs or becomes a certainty, some or all of the deferred income will be recorded as income. Just to be absolutely clear, under no circumstances are these Milestone Payments ever refundable to Sanofi. 7. Collaboration arrangement
Sanofi License Agreement and Sanofi Supply Agreement
On August 11, 2014, the Company and Sanofi entered into the Sanofi License Agreement, which became effective on September 23, 2014. Under the terms of the Sanofi License Agreement, the Company granted to Sanofi exclusive, worldwide licenses to certain of the Company’s patents, trademarks and know-how for the development and commercialization of AFREZZA. Under the terms of the Sanofi License Agreement, Sanofi has the exclusive right and responsibility to develop AFREZZA worldwide, subject to certain development activities that will be performed by the Company. Sanofi will also be obligated to use commercially reasonable efforts to file for, obtain and maintain marketing approvals for AFREZZA in certain major markets and countries. In addition, Sanofi will have exclusive, worldwide rights to commercialize AFREZZA and will be obligated to use commercially reasonable efforts to market, promote and commercialize AFREZZA in all countries in the world where regulatory approval for AFREZZA has been received. Under the Sanofi License Agreement, Sanofi paid the Company an up-front cash payment of $150.0 million in the third quarter of 2014 and a subsequent payment of $50.0 million in the first quarter of 2015 for the achievement of two manufacturing milestones as of December 31, 2014. If certain development, regulatory and sales milestones are achieved, the Company will also be eligible to receive up to $725.0 million in additional milestone payments, of which $25.0 million relates to a development milestone event, $50.0 million relates to the filing and completion of regulatory approvals and $650.0 million relates to the achievement of certain product sales milestones. In addition, worldwide profits and losses, which are determined based on the difference between the net sales of AFREZZA and the costs and expenses incurred by the Company and Sanofi that are specifically attributable or related to the development, improvement, regulatory filings, manufacturing, and commercialization of AFREZZA will be shared 65% by Sanofi and 35% by the Company. In accordance with the terms of the Sanofi License Agreement, profit and loss sharing commenced in the fourth quarter of 2014.
Pursuant to the terms of the Sanofi Supply Agreement, the Company will be the exclusive manufacturer and supplier of AFREZZA until the specified conditions are met, upon which a portion of the manufacturing activities may be assumed by Sanofi.
The Company analyzed the agreements entered into with Sanofi under the provisions of ASC 605, Revenue Recognition , to determine whether the consideration, or a portion thereof, could be recognized as revenue. ASC 605 provides that revenue is recognized when there is persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collection is reasonably assured. In addition, revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price of each deliverable and the appropriate revenue recognition principles are applied to each unit.
The assessment of multiple element arrangements requires judgment in order to determine the appropriate units of accounting and the points in time that, or periods over which, revenue should be recognized. Under the terms of the Sanofi License Agreement, Sanofi Supply Agreement and the Sanofi Loan Facility the Company determined that the arrangement contained significant deliverables including (i) licenses to develop and commercialize AFREZZA and to use the Company’s trademarks, (ii) development activities, and (iii) manufacture and supply services for AFREZZA. Due to the proprietary nature of the manufacturing services being provided by the Company, the Company determined that all of the significant deliverables should be combined into a single unit of accounting. The Company believes that the manufacturing services are proprietary due to the fact that since the late 1990’s, the Company has developed proprietary knowledge and patented equipment and tools that are used in the manufacturing process of AFREZZA. Due to the complexities of particle formulation and the specialized knowledge and equipment needed to handle the AFREZZA powder, neither Sanofi nor any third-party contract manufacturing organization currently possesses the capability of manufacturing AFREZZA.
In order for revenue to be recognized, the seller’s price to the buyer must be fixed and determinable. Given that as of June 30, 2015, the Company did not have the ability to estimate the amount of costs that would potentially be incurred under the loss share provision related to the Sanofi License Agreement and the Sanofi Supply Agreement, the Company believes this requirement for revenue recognition has not been met.
As such, the Company did not recognize any revenue pursuant to the Sanofi License Agreement or the Sanofi Supply Agreement for the three or six months ended June 30, 2015. The Company has recorded the $150.0 million up-front payment and $50.0 million from milestone payments as deferred payments from collaboration. In addition, as of June 30, 2015 the Company has recorded $13.4 million in AFREZZA product shipments to Sanofi as deferred product sales from collaboration and recorded $10.8 million as deferred product costs from collaboration. Deferred product costs represent the costs of product manufactured and shipped to Sanofi, not to exceed the amount of deferred product sales, for which recognition of revenue has been deferred. During the three months ended March 31, 2015 and June 30, 2015, the Company’s portion of the loss sharing was $12.4 million and $12.8 million, respectively, which resulted in the reclassification from current deferred payments from collaboration to Sanofi loan facility and loss share obligation.
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Post by trenddiver on Aug 18, 2015 13:05:07 GMT -5
No. Haven't posted on any other MNKD boards in quite a while (almost a year). If you want to see my posts, check out my profile on this board. Trend
Trend there is a Trend on the IHUB board who is ruthless and spreading FUD. I know you have been here a long time and I was not questioning your honesty. I just didn't like the comment. MY bad and I apologize.
Apology accepted.
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Post by trenddiver on Aug 18, 2015 12:36:07 GMT -5
KC, It doesn't really matter to me what you believe, but go ahead and "shoot the messenger" just because you didnt like the message. Truth be told, I didn't like the message either and tossed it around for several days as whether I would share it with the board. And BTW, this person was not someone I just met. Like I said, he was a friend of a friend whom I knew had started and managed a hedge fund and when we started talking about biotech stocks, I mentioned that MNKD was one of my largest holdings. It was then that he told me that his HF had been short MNKD, owned puts, and as part of the discussion explained his reasons for his short position. Trend Trend, Are you the same "Trend" who's a much more obvious basher on another MNKD message board? If so, you're much more subtle in your bashing here. No. Haven't posted on any other MNKD boards in quite a while (almost a year). If you want to see my posts, check out my profile on this board. Trend
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Post by trenddiver on Aug 18, 2015 12:20:05 GMT -5
KC, It doesn't really matter to me what you believe, but go ahead and "shoot the messenger" just because you didnt like the message. Truth be told, I didn't like the message either and tossed it around for several days as whether I would share it with the board. And BTW, this person was not someone I just met. Like I said, he was a friend of a friend whom I knew had started and managed a hedge fund and when we started talking about biotech stocks, I mentioned that MNKD was one of my largest holdings. It was then that he told me that his HF had been short MNKD, owned puts, and as part of the discussion explained his reasons for his short position. Trend Trend I wasn't trying to shoot the messenger but just voicing my skeptical view. Oh I see. You are "voicing your skeptical view", by stating I'm lying about the conversation I posted. NP.
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Post by trenddiver on Aug 18, 2015 11:31:26 GMT -5
Interesting that Hedge Fun Manager told a person he just met, his market thinking. Sounds like he has a special channel to Sanofi, Or the question by the GS analyst 2 conference calls ago is making the rounds. Golf course or bar? Personally I don't believe that Trend had that conversation. my view. seems far fetched that you just happened to meet a Hedgie invested in MannKind on the beach. Must have been up at the Hamptons. KC, It doesn't really matter to me what you believe, but go ahead and "shoot the messenger" just because you didnt like the message. Truth be told, I didn't like the message either and tossed it around for several days as whether I would share it with the board. And BTW, this person was not someone I just met. Like I said, he was a friend of a friend whom I knew had started and managed a hedge fund and when we started talking about biotech stocks, I mentioned that MNKD was one of my largest holdings. It was then that he told me that his HF had been short MNKD, owned puts, and as part of the discussion explained his reasons for his short position. Trend
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Post by trenddiver on Aug 18, 2015 2:00:14 GMT -5
Just out of curiosity, if you are long mnkd, did your talks influence you to sell?....or if you are short, did you short more?...thx I am very long Mannkind, but don't like what I see. My original plan to sell was when Al Mann sells. Unfortunately he didn't sell, and Mannkind is stuck in this venture with Sanofi with little or no control of its destiny, and with ongoing accruing liabilities. (MNKD would have been much better off with a licensing deal). Further, Al Mann is not running the company. So although I haven't sold anything, I am reevaluating when I plan to sell.
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Post by trenddiver on Aug 18, 2015 1:51:16 GMT -5
I was very surprised when I learned that this friend of a friend was actually on the other side of the trade. And yes, they are gamblers (we are all gamblers in a sense). So I wanted to try to understand why he would be short the stock (or own puts). What I wrote was kind of a summary of the short thesis that was the basis of his short position. It was not about FUD-this is what he and others believe. He wasn't trying to convince me of anything or publicize it, he was just sharing his opinion. One thing I have learned in my old age is to listen to others who don't share your own point of view, especially those who have a lot more skin in the game than me.
Look, the bottom line here is revenues, which right now are pitiful and don't even come close to supporting the market cap of Mannkind. Nor do the revenues support the manpower and capital being expended by Sanofi. Sanofi could very easily say "we've done our best, it's a good product but just too tough a sell at this time. We're moving on". Personally I think it's a more likely scenario than the constant banter on this board about Sanofi buying or investing in Mannkind in the near future.
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Post by trenddiver on Aug 17, 2015 23:01:53 GMT -5
Damn convenient for the shorts that the management shakeup occurred. Did you confront this hedge fund guy with the evidence that they are ramping up not slowing down expenditure? Just from a reputation standpoint I wouldn't think they'd want to ditch a product unless the product really fails on its' own merits... does he think it a bad product? How much does this guy know about what Afrezza is and does? Is he just following the herd? I certainly offered the bullish case as I know it. However I believe his HF and perhaps some other HF's who are shorting MNKD are taking their lead from JK, whose seems to be well respected in their circles. He doesn't think Afrezza is a bad product, he just believes that doctors won't be prescribing Afrezza in such quantities to support the current market cap anytime soon. He said that Sanofi new CEO will be evaluating all of its partnerships on a going forward basis and believes Mannkind will be on the chopping block. He acknowledged that there might be some events that could cause a short squeeze (insurance reimbursements, big jump in scripts, etc). Addressing cretin11 question, they liquidated the short position to take some profits and redeploy their assets, however, he did keep a position in the Jan 2016 $7 puts.
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Post by trenddiver on Aug 17, 2015 22:06:11 GMT -5
Just got back from vacation and I spent some time with someone who runs a small hedge fund ($200 million). The topic of Mannkind came up and he told me that his hedge fund just recently closed out his relatively large short position in Mannkind but stills owns lots of puts. He knows Jason Karp well and believes quite a bit of JK's short thesis. In fact he read me a portion of JK's recent comments of the recent MNKD CC. In summary, he said that the "Street" (very knowledgable Wall Street gamblers) believe that the CEO of Sanofi has no real commitment to Afrezza and further believe that's it's highly likely that Sanofi will terminate the partnership early in 2016. He thought that if that happens, the share price could drop to $1.50. i know that this is diametrically opposite of what we heard on the CC - and that's why I titled this thread "For What It's Worth".
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